1

INDEX

SR.NO PARTICULARS PAGE

NO.

Project Summary

1 Cluster Profile 1

2 Cluster Product and Value Chain 17

3 Market Assessment and Demand Analysis 28

4 SWOT and Need Gap Analysis 31

5 Profiling of the Implementing Agency 34

6 Project Concept and Strategy Framework 37

7 Project Interventions (Core SFURTI) 40

8 Soft Interventions 45

9 Hard Interventions 46

10 Project Cost and Means of Finance 47

11 Plan for Convergence Initiatives 49

12 Enhanced Project Cost with Convergence of

Schemes

51

13 Project Timeline 52

14 Detailed Business Plan 55

15 Proposed Implementation Framework 64

16 Expected Impact 68

Check List

Annexure I - Land Lease agreement

Annexure II – SPV Registration Certificate

Annexure III – Memorandum of Association

Annexure IV – Bye-Law

Annexure V – SPV Members List

Annexure VI – Bank Account Details

Annexure VII – Tripartite Agreement

Annexure VIII – Consent Letter from Bank

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CHAPTER 1: CLUSTER PROFILE

1.0 Background (Support for Traditional Industries –National Scenario) :

Indian heritage and sustenance is interwoven with traditional industries. Indian

masses are heavily depends upon this sector, and probably the most involved

sector after agriculture. With a view to making the traditional industries more

productive and competitive and for facilitating their sustainable development,

the Govt. of India announced setting up of a fund for regeneration of traditional

industries, with an initial allocation of Rs.100 crore. Subsequently, a Central

Sector Scheme titled the “Scheme of Fund for Regeneration of Traditional

Industries (SFURTI)” was approved at a total cost of Rs.92.25 core. This

scheme was implemented by the Ministry of Micro, Small and Medium

Enterprises (MSME) through two nodal agencies viz; (i) Khadi and Village

Industries Commission – KVIC; and (ii) Coir Board. Endorsement of SFURTI by

working Group of Planning Commission on XII Plan provides support to coir

sector in a meaningful way.

Announcement of Finance Minster in the Budget of 2013-14 for extending the

support to 800 clusters of Khadi, Village Industries and Coir are made a budget

outlay of Rs.850 crore for the benefit of 4 lakh artisans. The support is

extended basically for three types of intervention viz; (i) soft, (ii) hard, and (iii)

thematic.

Coir Industry:

Coir industry in India was originated from Kerala and now being expanded to

other coconut producing States like Tamil Nadu, Karnataka, Andhra Pradesh,

Orissa, West Bengal, Maharashtra, Assam, Tripura, etc. It employs more than

7.00 lakh person and majority of them are from rural belt and belongs to

economically weaker sections of the society. 80% of the coir workers are

3

engaged in fibre extraction and spinning. Adoption of technology has brought a

wide range of coir products in India. This development has enhanced volume

of coir business to over 1000 crore on date.

A total quantity of 5,37,040.38 MT of coir and coir products valued at

Rs.1476.04 crores was exported from the country during the period April 2013

to March 2014 as against an export of 4,29,500.92 MT valued at Rs. 1116.02

crores achieved during the corresponding period of previous year. There is an

overall increase of 25% in quantity and 32% in value over the export achieved

during the corresponding period of the previous year. The target fixed for coir &

coir products for the year 2013-14 by the Ministry of MS&ME, Govt. of India,

New Delhi, is Rs.1000 crores. The achievement upto March 2014 during the

year is 147% of the target fixed by the Govt. of India which is an all time high in

the history of coir industry. (www.coirboard.gov.in)

These developments in products as well as business has caused for formation

of various agencies in the country. Federation of Indian Coir Exporters

Association (FICEA) is one of the most important federations in the coir

industry. It is the Confederation of Coir and allied products Exporters of India.

FICEA, under its single umbrella, has to its credit all the Exporter Associations

of coir from the country namely- Indian Coir Association, Indian Coir Exporters

Chamber, Coir Shippers Council, Travancore Coir Mats & Mating

Manufacturers Association and The Coir Pith & Allied Products Manufacturers

& Exporters Association.

Relevance of SFURTI in cluster approach:

While industry is gearing up with production and export business, it has still a

lot of limitations. Shortage on availability of yarn for the industry and the

sensitivity of its required quality is a bottleneck. The shortage of coir yarn and

its fluctuating price is becoming a survival problem for the industries. The level

4

of mechanization is very low in the coir industry and it is required at each and

every stage of production to create competitiveness. Low productivity due to

the manual processes right now is also one of the major challenges. SFURTI

cluster approach is a right option and tool to address these kinds of socio-

economic upliftment process wherein artisans are benefitted in building their

lives and nation earns Forex as well as paving way to reach double digit

growth.

Coir in Alappuzha:

The coir industry was mainly concentrated in and around Alappuzha. During

the post-independence period nearly a dozen of large scale units sprung up

and were doing significant business. In the early seventies the units faced

excessive trade union activities that gradually led to fragmentation of the

industry. In this process the industrialists became merely exporters, sourcing

products from small entrepreneurs.

These structural changes adversely affected the health of the industry and as a

whole lead to un-remunerative prices at all stages. Intervention by the

Government and regulating agencies could mitigate the problems to a limited

extent only. During the nineties, while the industry registered reasonable

growth the availability of husk got reduced due to a combination of factors. This

gradually led to a situation of shortage of fiber and the industry started

depending on fiber brought from neighboring states. Today nearly fifty percent

of the requirement of fiber in Kerala is brought from Tamilnadu.

Coir products are made from fiber and that fiber is taken from the husks of

coconuts, by using century old production techniques. Traditional products

have mainly revolved around the production of mats and matting:

5

Mats: Largely door mats, mats are made from a mix of coir yarn (as the base) and rough fibers (as bristles).

Matting: Woven matting from coir yarn is done on handlooms and used in interiors of houses, commercial spaces, and ships. Semi-automated and fully-automated (or „power‟) looms have been more recently introduced.

Traditionally a cottage industry, the coir sector has more recently been undergoing

substantial changes as more capital intensive products are coming on-line. Non-

coir inputs are also increasingly being used, with coir accounting for only 60% of

the total product. New products include:

Geo-textiles: Similar to coir matting, geo-textiles have a looser weave and are used outside for erosion control („pre-vegetative protection‟).

Rubberized Coir: Using another important Kerala commodity, „rubberized‟ products include products that combine coir and rubber (such as a coir mat with a rubber trim or backing) or blend the coir fibre itself with rubber (such as coir-rubber composites for car seat stuffing).

PVC Mats: One of the latest changes in coir production, PVC mats are made from coir fibre brushes adhered onto PVC base (or „seat‟).

Mixed Products: In Alappuzha floor-coverings cluster is increasingly incorporating non-coir inputs into its products. Apart from rubber and PVC as raw materials, jute, sisal and cotton are also the raw materials used.

1.1 Regional Settings of the Cluster:

The history of Coir and its association with the State of Kerala dates back to the

19th Century. Sandwiched between the Western Ghats on the east and the

Arabian Sea on the west, Kerala is one of the most beautiful States in India. A

tropical paradise of waving coconut palms and wide sandy beaches, this thin

strip of coastal territory slopes down from the mountain Ghats in a cascade of

lush green vegetation and varied fauna. One of the most commonly seen

tropical trees in Kerala is the Coconut tree. In fact, even the name Kerala

(Keralam in Malayalam) is derived from this tree (“Kera” in Malayalam language

means Coconut and “Alam” means Land, thus Keralam = Land of Coconut).

6

Everything in Kerala, from culture to its dishes, is evolved around the Coconut

tree.

Alleppey (Alappuzha in Malayalam) is the nerve centre of Kerala's famous Coir

industry. Here, one can see coconut husks being beaten into fibre for making

beautiful mats and other coir products. Both men and women are actively

involved in the production of Coir. The women are mainly involved in the yarn

spinning sector and the men in the product-weaving sector. Coir Industry

enjoys the status as the largest Cottage Industry in the State of Kerala, giving

employment to over a million people. Kerala also has a very fine natural

harbour located at Cochin (Kochi).

Coconut Production in Kerala

Among the Indian States, Kerala tops in production of coconut in the country.

As per the data available from Horticulture Department, during 2013-14,

coconut was cultivated in 797.21 hectares in Kerala. During the same year it

was estimated a coconut production of 5968.01 million nuts with a productivity

of 7486 buts per hectare.

Coconut Production in Alappuzha

Statistics given by Coir Board reveals that in Alappuzha during 2000-2014

coconut production was done in 47416.84 (HA) land and 2827.14 million nuts

produced. It also shows the productivity as 5962 (nuts/Ha). However, it is worth

to mention that, even after such promising scale of coconut production, the

fibre production is too low. The fibre requirement is basically met with

purchases from other locations and States. The basic coir related work in

Alappuzha start with spinning activities.

7

Coir Industries in Alappuzha at a Glance:

S. No Type of Industry/Activity

No. of Industries

1 Spinning

8

2

Dyeing 15

3 PVC Tufted Coir Products

7

4 Handlooms/ Fiber mats

210

5

Coir Matting‟s/ Rugs 182

6 Rubberized Coir products

29

Total

451

(Source: Winrock Internatioal India.) 1.2 Location:

The proposed project location Haripad belongs to Alappuzha District. Located

at the south-western tip of the Vembanad Lake, Alappuzha had its heyday as a

commercial hub when Dewan Raja Keshavadas, in 1775-76, built it to be a

major port of the erstwhile Travancore State. The proposed cluster location

covers Muthukulam and Haripad blocks of Alapuzha district. The cluster will

attract coir activities mainly in 18 villages of these Blocks.

1. Arattupuzha

2. Cheppad

3. Cheruthana

4. Chingoli

5. Haripad

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6. Kandallor

7. Karthikappally

8. Karuvatta

9. Devikulangara

10. Krishnapuram

11. Kumarapuram

12. Muthukulam

13. Pallippad

14. Pathiyoor

15. Thrikkunnapuzha

16. Veeyapuram.

Karthikapally,

Muthukulam,

Kayamkulam

9

Coconut Production in Haripad:

The overall assessment of coconut production during 2000-2014 in Haripad

shows that on an average 1799.50 ha area was cultivated for coconut

production. There was also an estimated production of 121.89 lakhs nuts

during this period with a productivity of 6773 nuts/ ha. The details of coconuts

production during 2011-2014 is given below:

Coconut Production in Haripad during 2011-2014

10

1.3 Evolution of the Cluster:

Alappuzha (known as Alleppey) is the nerve centre of Kerala‟s famous Coir

industry. Here, one can see coconut husks being beaten into fibre for making

beautiful mats and other coir products. Both men and women are actively

involved in the production of Coir. The women are mainly involved in the yarn

spinning sector and the men in the product-weaving sector. Coir Industry

enjoys the status as the largest Cottage Industry in the State of Kerala, giving

employment to over a million people. Kerala also has a very fine natural

harbour located at Cochin (Kochi). From the ancient times itself Cochin had

found a place in the minds of Europeans as a trading centre because of its port

and spices.

The Coir Board was established in Alappuzha in 1955. Then, the National Coir

Training and Designing Centre came up in 1965. Subsequently, the Coir

Research Institute is also established. Coir continues to be an important

cottage industry for the local people. It is common to find doormats crafted out

of tufts of coir fibre in small village units and people even making coir ropes in

their backyards.

The extraction of coir fibre and small scale production of many coir based

products provides employment to almost 90% of the womenfolk of the coastal

belt of Haripad area. This makes the coir industry important to both labour and

economy of western region of Haripad. Even though not much value addition

based coir industry exists in the location, the employment in coir sector is a vital

economic activity in the Panchayats and villages wherein cluster activity is

proposed. Raw materials for coir industries are now sourced from Tamil Nadu

and quality of those procured fibre is low when compared to the local fibre.

11

Societies and Active Coir Workers in the Cluster:

The cluster consists of Kayamkulam, Muthukulam, Haripad and Karthikappilly

area. In this location there are 127 societies registered and out of them 93

societies are functioning well as on 31.03.2015. The details of these societies

are given below:

Type of Societies Registered Working

Primary Coir Co-operatives 80 74

Integrated Coir Co-operatives 44 18

Yanthravalkritha Chakiri/ Coir Vyavasaya Co-

operatives

2 1

Others 1 0

Total 127 93

Altogether these societies had a membership of 61,579. Among them 2721

members are sympathisers and 58,858 are members. Out of them 42796 are

women and 1719 belongs to SC and 61 are ST.

12

PRESENT CLUSTER ACTIVITY– HARIPPAD

Coir Production during 2014-15 in the cluster location:

Arattupuzha, Vaikom, Mangadan are the varieties of coir produced in the

cluster. During 2014-15, 57 societies in the project area worked more than 100

days for coir production. During the financial year 2014-15, the societies of

these area had produced 4250 Ton of coir worth Rs.20,76,88,037 by using

4815 Ton fibre.

Problems being faced by the coir industry in Haripad:

(i) While Alappuzha district stands as the apex centre for coir production

and related activities of India, the nearby area Haripad within the district

is not able to contribute significantly.

Coir Fibre brought

from other places

Coir Yarn

2 ply coir yarn

13

(ii) The revolutionary changes of Alappuzha in the production of value added items could not tap the potential of Haripad area.

(iii) Artisans at Haripad still using only out dated and traditional technology for production.

(iv) In Haripad approximately 127 societies are registered.

(v) The land available with Co-operative Societies is not able to utilize for productive purpose. At the same time, micro and small enterprises are running around for getting land for production centres.

(vi) Co-operatives, as a whole, depend upon government support & strategies and they are unable to bring dynamism, vibrancy and professionalism in their work.

(vii) Co-operatives not able to operationalize any new marketing channels and so remain with traditional market and approach. Its sole agency, Coirfed is the only marketing channel available with them.

(viii) As the young generation is detracted from the sector, innovation is not coming in the sector.

(ix) More than 95% of the coir production is limited with Coir and meager percentage is for Matting. Only 3 units are functioning for defibring.

(x) The vast experience and expertise available in the cluster is not able to use neither for production or marketing.

(xi) There is no right kind of repair and maintenance centre for repairing their tools and equipments.

(xii) The prevailing social thoughts and actions are not conductive for de-fibring process in the area.

(xiii) Defibring process is not taking place actively in the location. Coconut husks are being taken to other States and in turn that comes as Fibre which is being used in the cluster.

1.4 Demography and Growth Trends:

Alappuzha is a veritable maze of bridges and canals, the presence of which

has given it the appellation the "Venice of the East". Alappuzha district stands

14

foremost among the districts of Kerala in regard to the density of population. It

also stands first among other districts of Kerala in respect of its literacy rate.

The entire area of the district lies in the low land and the midland divisions, and

is the only district in Kerala having no area under the high lands. Kuttanad, the

rice bowl of Kerala is in Alappuzha district. The total production of rice here is

almost ten percent of the total production of the State. Alappuzha is the most

important centre in the State for coir industry. Almost 80 per cent of the coir

factories in the State are in this district.

Alappuzha is the smallest district of Kerala and as per the latest census its

details are as follows:

Area1,414Sq.Km. which constitutes 3.64% of the total state area.

The population size 21,09,160 persons, ranks the 9th among the districts in population.

Population density- 1492 persons per Sq.Km, against 1415 in 1991- retains the first position in the state.

Sex-ratio (No. of females per 1000 males) - 1079 , earning 4th position (5th position in 1991 with 1051)

Literacy Rate 93.4 % which earns it 3rd position in the state.

Female Literacy rate 91.14 which again earns 3rd position in the state. (State Average-87.86%)

Work Participation rate 34.3 %, 6th position in the state

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1.6 Socio-Economic Aspects

Alappuzha is a backward district in terms of the standard of living of the people.

The majority of population of the district comprises agricultural labourers and

coir workers. Though literacy rate in Alleppey district is in the second rank as

compared to other districts, employment rate is not proportionate to the literacy

rate. The awareness of democratic equality and the land reform measures

offered a feeling to the individual that each is equal to anybody else. The high

literacy level coupled with the achievements of the labour class has speeded

up the breakdown of the coterie of casteism and landlordism in the district.

1.7 Human Development Aspects

As of 2014, Kerala has a Human Development Index (HDI) of 0.790 which

comes under the "high" category and it is the highest in the country.

Comparatively higher spending of the government in primary level

education, health care and elimination of poverty from the 19th century onward

has helped the state to maintain an exceptionally high HDI.

1.8 Key Economic Activities in the Region

Kerala suffers from low industrial growth. The share of manufacturing industry

is low and within manufacturing, unregistered manufacturing forms a

disproportionately large part. The path forward is based on the idea of

sustainable industrialization. This would balance economic prosperity,

environmental stewardship, and social sustainability. It will prioritize high

knowledge activities and diversify the industrial structure. It will adopt Clean

Production Systems to mainstream environment. A cluster development

approach for Kerala is recommended with one town one industry and one

village one product model. Kerala may promote logistic hubs given its unique

location. Regional innovation systems will be built. Skill development and

entrepreneurship for sustainable development are to be encouraged. Kerala

16

must pay special attention to small and medium enterprises. Enforcement of a

social security system and strict compliance with decent working conditions are

necessary for inclusive development. Every action must be benchmarked

against international standards.

1.9 Infrastructure – social, physical, financial and production – related

Necessary facilities are to be created during the cluster intervention. The

location is well connected with main roads or national high way road. The

nearest airport is Cochin and Railway Station is Kayamkulam. The premier

agency of coir sector i.e., Coir Board is in Cochin which is nearby district of

Alappuzha. Central Coir Research Institute and National Coir Training and

Design Centre both are located at Alappuzha.

Roads

The credit for development of roads in this district goes back to the period of

Ramayyan Dalawa, the Dewan of Travancore, who opened several roads

chiefly for the convenience of militia and for traffic. With the appointment of Mr.

Bartom as the Chief Engineer during the time of Dewan Madhava Rao,

remarkable progress in the expansion of roads has been achieved. With the

opening of the Alappuzha -Changanacherry road in 1958 this district has a

network of good motor able roads.

Water Transport

The commercial canals connecting the nook and corner of this district are its

life line. Canals, rivers and backwaters afford an easy and cheap mode of

transport of goods and men which was one of the main reasons for the

importance of Alappuzha town as the major commercial centre of older times.

17

CHAPTER – 2: CLUSTER PRODUCT AND VALUE CHAIN

2.1 Product Profile:

At present the main cluster product is Coir and its yarn. 3 units are engaged in

defibring and a couple of units are engaged in the production of matting.

Fibre

The coir industry has been undergoing various modernization process aimed at

dispensing with the polluting retting process. Mechanized defibering process

has replaced the traditional one considerably. In this process, the brown fiber

will be received. Novel developments by the Central Coir Research Institute,

under Coir Board, using a bio-technological approach with specific microbial

enzymes have reduced the retting time substantially to three to five days. High

quality fiber production has been maintained. The cluster has got about 3-5 DF

units working and in the due course there is every prospect than this number

will double with the demand from the value added production of coir.

Coir Yarn Production

The commencement of Major cluster in Haripad, the demand for coir yarn

increased considerably. This will compel the entrepreneurs as well as societies

to increase the Production with the existing or enhanced machineries.

The automatic spinning machine units are capable of production of yarns of

runnage varying from 50 to 300 meters/kg and twists from 10 to 30 twists/feet.

Coir fiber in the form of bales is the raw material for the unit. These fibers are

soaked in water for one hour and are cleaned in the willowing machine. Pith

content and the hard bits are removed in the process. Manual attention is also

required to remove the hard bits to the fullest extent. These cleaned fibers are

passed in to the feeder of silvering machine where the fibers are paralleled and

18

drawn by draw rollers. These paralleled fibers are twisted and taken on to

drum.

Mattings:

The most used coir items in the world is door mats and mattings. As such it has

great potential to produce and export. In domestic market also it has

tremendous potential.

2.2 Production Process

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The coconut is plucking from coconut tree

Manually or mechanically husk is removing from the

coconut

The fibre is extracted Manually or mechanically from

husks. Mechanized defibering process has replaced

the traditional one considerably.

The automatic spinning machine units are capable of

production of yarns of runnage varying from 50 to

300 meters/kg and twists from 10 to 30 twists/feet.

Coir fiber in the form of bales is the raw material for

the unit. These fibers are soaked in water for one

hour and are cleaned in the willowing machine.

process. Manual attention is also required to remove

the hard bits to the fullest extent.

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2.3 Value Chain Analysis

Value Chain- Husk to Tufted Mat

Husk 12000 husk/day * Rs.600/1000

husk Rs.7200/-

Fiber- 1000 kg

Rs.18000/-

Coir Pith-

2000Kg -

Rs.700-

• Electrical/Diesel charge-Rs. 5000

• Labour Charge-Rs. 5000

• Miscellaneous Charge-Rs. 2000

Yarn- 1000kg– Rs. 40000/-

• Electrical/Diesel charge-Rs. 4000

• Labour Charge-Rs. 5000

• Miscellaneous Charge-Rs. 2000

Price Rs.400/- sq mtr

Prodn- 390 sq. mtr

Total worth Rs. 1,56,000/-

• Labour Rs.1805/-

• Others Rs.87,973

Total Expenses from

husk to fiber- 19200

Total Expenses from

husk to Yarn- 30200

Total Expenses from

Fiber to Yarn-

35200

A verity of Mats or mattings are woven either manually

or technologically to sell in the global market

20

21

2.4 Cluster Map

PRESENT CLUSTER MAP HARIPAD

Central/ State Govt. Policy Environment

Commercial Service Providers

Interstate

Fibre

Intermediaries

Machinery

Supplier

--Accessory

Supplier Public / Private Support Providers

CCRI KSCCF KITCO EDII KIED Industry

Association

DIC MSM

EDI Coir

Board

rd

Coir

Project

Office

Transport Finance

Bank/FI KINFRA

A

Farmers

Raw Material

suppliers

Consultants/BDS

Direct Market Defibering

Yarn,

Curled Coir

Fibre

Coir Pith

Matting

22

Cluster Map after Intervention

EXPECTED CLUSTER MAP IN HARIPAD

Central/ State Govt. Policy Environment

Commercial Service Providers

Consumables

Supplier

Farmers

Direct

Customer

Farmer

Machinery

Supplier

Accessory

Supplier Public / Private Support Providers

CCRI

KITCO

EDI

I

KIED Industry

Association DIC

MSME-

DI

Coir Board

Coir Project

Office

Testing Laboratory Transport Finance

Bank/FI Consultants/

BDS

KINFR

A

Retail Shop

CPS

Matting

RMB

Fiber

Yarn

CFCs

3 Nos

Training Centre

Curled Coir

23

Plan for Backward and Forward linkage for strengthening the Major Cluster of

Haripad

Backward Linkage

a) Sensitizing Farmers on Husk Utilization: As substantial percentage of available

husks at the location is either using for fuel purpose not using at all. As husk

being the heart of coir industry, the farmers are to be sensitized on the need for

husk collection, storage and sale.

b) Strengthening Coconut Producers Society (CPS): Presently the total coir

industry is purely depended on Pollachi fibre merchants for their fibre supply.

But the effort has to made for production of fibre in the cluster itself. In view of

this, the CPS formed and controlled by Coconut Development Board can be

oriented and some of them can start defibring units at the location. The close

linkage and co-ordination with CPS will be able to monitor husk collection

management and its storage.

c) Long term tie up can be made with inter-state fibre merchants and other

clusters to ensure the availability of quality fibre for haripad raw material bank.

d) Promote mobile defibring units at Panchayat level

e) Engage Kudumbasree /Janasree/ SHGs for collection of husk

f) Promote private entrepreneurs for collection of husk and defibering.

Foreword Linkage

i. Provide training to artisans on automatic spinning machine and enhance the

productivity.

ii. Constant availability of the raw material provides scope to produce value added

items.

iii. The strategy also provides potential and possibility for attractive private

entrepreneurs into the coir sector.

iv. Sufficient tie ups can be made to export the products

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2.5 Principal Stakeholders

The cluster is having 127 coir operative societies. The total number of

members in these societies is 61,579 as on 31.03.2015. This includes 2721

sympathisers. Total number of workers are 58,858. There are 42,796 women

and 16,062 men. This group includes 1719 sc members and 61 ST members.

During the financial year 2014-15, in the cluster area 10588 workers engaged

in the coir production.

Business Development Service Providers

Machinery Suppliers

Currently the stakeholders are approaching manufacturers from different parts

for necessary machineries. Modernization of machineries is a very slow

process. An awareness exercise is to be carried out to get a better option for

stakeholders. Research and development works has to be executed for

modernization of machineries.

Coir Board Kochi

Coir Board‟s presence at Cochin is very advantageous for the CFC. They

provides financial, market development, skill training assistance for the

development of coir industry and extends the financial guidance and advice for

setting up of new units as well as for renewal/modernization of existing units for

development and increasing productivity, quality up-gradation etc.

District Industries Centre

This Kerala government organization helps existing and potential entrepreneurs

from all walks of life and sectors. DIC is equipped with Entrepreneurs

25

Guidance Cell to guide the entrepreneurs. In addition to this, there are several

schemes of state and central governments directed through this organization.

Kerala State Co-operative Coir Marketing Federation (Coirfed)

COIRFED, an Apex Federation of Cooperative Societies engaged in the

manufacture of coir and products is entrusted with the task of marketing the

products of the cooperative societies. It aims the sustenance of coir workers,

especially women. The mission of COIRFED is to eliminate middlemen and

provide better services to cooperatives. Presently, more than 620 societies, all

over Kerala, is affiliated to this organization.

The product range of Coirfed include fiber, pith funus, pith soil condition, 80 odd

varieties of coir yarn, geo-textiles, alluring range of coir products like mats,

mattings, rugs, coir tiles and rubberized coir products like mattress, pillows,

PVC tufted mats, briquettes, garden materials like pots, climbers etc.

Commercial banks and micro finance institutions

The stakeholders are having linkages ranging from Co-operative to

Nationalized banks. Almost all the nationalized banks, designated cooperative

banks have branches all over Alleppyand surrounding areas. In addition these,

there is district level offices of specialized financial institutions like NABARD

etc.

2.6 SWOT Analysis

Strength:

Low investment with high employment

Easy availability of raw material at reasonable rate. The present utilization

is too low for fiber and yarn production.

26

Exposure to SFURTI scheme during XI plan period

Traditional suppliers and input providers

Govt. assistance through the Project Office, Alleppy

Market can be expanded as an eco-friendly product, for export market

Good transport link, rail, road, water and air.

Weaknesses:

Low credit facility due to inability of stakeholders to provide collateral

security and margin for working capital

Lack of linkage and trust among important stake holders

Limited use of high level technology and modernization

Lack of entrepreneurial and management skills among the stakeholders

Lack of awareness in technical and managerial knowledge

Opportunity:

Natural product and eco-friendly hence acceptable to even developed

market

Government‟ initiative of Make in India plan

Availability of govt. schemes like SFURTI, soft credit etc.

Working capital mobilization under raw material bank etc.

Increased acceptability of products like geo-textiles and pith

manure/briquettes

Threats/Challenges:

Availability of cheaper more attractive synthetic products

Absence of modernization, technology upgradation

27

Competition from countries like Srilanka, Philippines, Bangladesh and

Vietnam

Irregular supply of power and increasing cost of power

Political interference in developmental activities.

28

CHAPTER 3: MARKET ASSESSMENT AND DEMAND ANALYSIS

India is one of the top producers and exporters of coir in international market.

The Indian Coir Products are in great demand in the international market

because of their special attributes like fitness, price, craftsmanship, quality,

attractiveness and Eco-friendly, biodegradable renewable natural resources,

non-pollutant, usage of the product is up to the expected level when compared

to plastic and other environment pollutant item. Even though India is one of the

leading exporters, it could not top the list and there seems to be several

reasons for its unsatisfactory and poor performance in Coir and coir products

exports.

The exports of Coir products from India during the year 2014-15 registered an

all time high record of Rs.,1630.33 crores with an increase of over Rs.154

crores from the previous year. The total exports of coir and coir products from

the country was worth Rs.1476.03 crores in 2013-14. During 2014-15, 6,26,666

MT of coir and coir products were exported from the country as against

5,37,040 MT exported during the preceding year. While coir pith, coir fibre,

handloom mar, coir rope, curled coir and coir rugs and carpets registered a

growth ranging from 12 to 45%, coir yarn, tufted mat, power loom mat,

handloom matting, coir geo-textiles and rubberized coir recorded decline

ranging from 5 to 51%.

China is the major importer of coir fibre for manufacturing mattress boards for

their domestic requirements. They are focusing further to import more coir

pith/grow bags for horti/ agricultural requirements. The coir handloom products

export has shown a marginal increase by quantity but no increase by value

comparing last year.

29

Following diagram provides details of export composition of coir and coir

products during 2014-15.

Domestic and local Market:

The strategy that cluster adopts is strengthening and enhancing the productive

mode of artisans. The coir production of Haripad area in a month is 768 Ton.

This demands a need for 850 Ton fibre. The raw material bank proposed is

able to transact this amount at a competitive price.

Through the proposed initiatives, the project will be able to supply the fibre

Rs.1/- lower than the current market price, i.e, the current market price is

Rs.22/- and the Raw material bank will be able to supply the material by

Rs.21/-. This cost difference itself will be a major marketing strength.

30

As the cluster is of artisans themselves and SPV is managed by their

representatives, the acceptability itself will function as core marketing strength.

The proposed automatic spinning machines are of high quality machines, that

produces 300% more output than that of electronic ratt. As such more artisans

will be coming forward for taking training on such machines and gradually they

will be motivated to own machines

31

CHAPTER 4: SWOT AND NEED GAP ANALYSIS

A threadbare discussion with various stakeholders of the clusters helped us to

understand the limitations and dynamics of the cluster with more clarity. Following are

our major observations on the cluster.

Strengths:

The unemployment situation in Kerala is acute and youth especially women prefer to

engage in economic activities directly. The socio-educational culture of the cluster

location, as in the case of Kerala State, is provides scope to engage technical people

in the cluster. The district is a coconut growing centre and it can provide the basic

raw-mateiral, i.e, husk in required quantity. If a cluster intervention is placed and value

added products are begin to produce then, local husk could be fully de-husked in the

cluster itself. As the coir related work is very old in the cluster, ample human

resources are available there. The fibre produced in the cluster location is of best

quality and its value added products will encash better results. Almost all

nationalized/scheduled/commercial and developmental banks are existing in the

cluster. Similarly, District Industries Centre, Coir Board like organizations can work as

a pro-active promoter of the cluster.

Weakness:

One of the limitations of the existing cluster is lack of improved technology. Similarly

though raw material, i.e, husk is available there is no effective mechanism to collect

them. Might be there is an entrepreneurial gap within the cluster so that it is not

geared to acquire higher limits. Probably this is also affected production cost in

adverse way. Economy of scale and effective approach is to be inbuilt within the

cluster. A cordial linkage is missing between within the cluster actors, especially with

manufacturers and actual buyers. Proper awareness and exposure on technology,

32

production process and prospectus of the cluster remain unaltered. The attitude for

product diversification is not much there. Though the cluster has banking and financial

institutions it is felt that some of the units are facing acute working capital crunch.

There is no better packaging facility and also no initiative to publicity and

advertisement.

Opportunity:

The cluster can prevent the plastic and other substitute products and make

opportunity for coir products. There is a tremendous scope for creating value added

products and spread the reach. The initiative like MUDRA Bank will be useful to

nurture new entrepreneurs in the cluster. Similarly there is a better opportunity for

addressing the working capital crunch. As the cluster has availability of husks,

creation of value added products by using manufacturing fibre there itself will help the

cluster to compete with other market players.

Threats:

The expected threat for the product in the international market is on price of the

products. The technology is highly influencing the price structure. If effective

mechanism is used for production that will cause for cost escalation as well as in

pricing pattern. If price of plastic products reduced further that will further reduce the

scope of coir products. Lack of continuous electricity may create havoc if high end

machinery installed for production. The state like Kerala is highly alerted on

environmental degradation and the process could be tampered, if proper mechanism

and sensitization is not carried out.

33

Need Gap Analysis:

o As per the statistics of Coconut Board, the production of coconut in Haripad is

270.00 million nuts during 2013-14 as against the average production of 121.89 million nuts estimated for the same place for the period of 2000-2014. Though coconut production is in an upward curve there is no mechanism or channel to effectively utilize its husks locally.

o There is no sufficient defibring units exist either in the cluster or nearby location

to carry out the coir work. Lack of shortage of fibre as well as its constant availability also remains as challenges of the sector.

o The pro-active initiatives of the State Government to supply electronic ratt and other equipments have generated a positive approach of coir workers to the sector. However, there is no availability of fibre in a competitive manner.

o The co-operative societies functioning in the area has land for production, but they are not able to make agreement with any agency for using the land, machinery and other assets, as they have always a fear that later on they will be thrown out from the process. This scenario needs intervention of developmental agencies to motivate them for engaging in collaborative mode.

o The daily earnings of an average labour in Kerala is more than Rs.500/-. At the

same time by engaging in coir sector, artisans are getting a maximum of Rs.250/- This is one of the basic reasons for marginal functioning of some of the co-operative societies in Haripad.

o The replication of new type automatic spinning machine is helpful to produce

market driven coir variety viz; Vycom or Aratary.

o Even through, there are no sufficient defibring units in the cluster approximately 4250 ton coir were manufactured in the cluster in the last financial year. If they are motivated and support professionally, this cluster will be conducive to grow much and will be a significant contributor to coir industry.

34

CHAPTER 5: PROFILING OF THE IMPLEMENTING AGENCY

5.1 Institutional Structure:

The Implementing Agency of the proposed Haripad Coir cluster will be

Directorate of Coir Development, Nandanam, Thiruvananthapuram. They will

implement the activities through its Project Officer in a locally established office

in Kayamkulam. The Directorate is headed by an IAS Officer and it is

functioning as per the rules and regulations of Government of Kerala.

5.2 Governance Structure:

All policy level matters will be done in consultation with Director by the Project

Officer. All its activities will be transparent and they hold responsible for

implementation. Following is the Organogram of the IA.

35

5.3 Operational Profile:

The overall vision of the Directorate of Coir Development is to safeguard the

socio-economic level of coir workers and its associated agencies. There are 10

coir project offices in Kerala covering coir operation of entire state from 9

districts. In Alappuzha there are two project offices; one is in Kayamkulam and

the second one in Alappuzha itself. Project Officer- Kayamkulam would

operationalize activities in the Haripad cluster. He may adopt strategies in line

with the scope prevail in coir sector and also by focusing coir development

strategy prescribed by Government of Kerala in particular and Government of

India in general.

5.4 Management Profile:

The Director of Coir Development division, Govt. of Kerala is an IAS officer who

hold accountable for all kind of implementation of activities in the cluster.

Director has delegated the power to its local project officer for implementation

process. Both these officials will be primarily responsible for all kind of

management of the cluster. While policy level decision is taken care of by

Director, Directorate of Coir Development, the project implementation will be

managed by Project Officer.

They have already formed an SPV to ground the activities. This SPV is

registered under Travancore-Cochin Act and titled as Haripad Coir Cluster

Development Society (HCDS) vide Regn.NO. ALP/TC/403/2015 on

15.07.2015.

In addition to this, Entrepreneurship Development Institute of India (EDI) an

internationally acclaimed entrepreneurship development agency is providing all

kind of technical support to all stakeholders of the cluster.

36

5.5 Financial Position:

As Implementing Agency being the Government of Kerala, there may not have

any scope to assess the financial position.

37

CHAPTER 6: PROJECT CONCEPT AND STRTEGY FRAMEWORK

6.1 Project Rationale

Haripad is one of the highly populated places of coir artisans in the State. Their

experience and expertise could not be utilized to production, as they have

limited scope to get access to high tech production system. Similarly, other

limitations that faces by the artisans at local area is constant supply of fibre. In

view of this the project proposes to provide Raw-material banks and a training

centre with state of art automatic spinning machines that have productivity of

300% compared to the locally available machines.

6.2 Project Objective:

The main objective of the project is to provide vibrancy to the coir activities in

the cluster and position it with value added products. However, the intervention

will also focus to:

o Regular supply of quality fibre o Demonstrate benefits and needs for using high end modern automatic

spinning machines for coir production o Constant availability of fibre as well as coir motivates for production of

value added products o Attracting youngsters into the cluster and provide meaningful income to all

its dependents as there is potential to enhance production to more than 300% and likely income.

o Directly as well as indirectly help for boosting export market of the coir products

o Establish the linkage of Haripad with Alappuzha for the promotion of Coir and its other value added products.

38

6.3 Focus Products/ Services:

Keeping in mind the project objective as specified above, the cluster

intervention focus on followings:

Products:

Through raw-material bank sourcing of fibre at bulk purchase mode from other

states or locations and its retting and cleaning the same at CFC. This will be

further supplied at the door step of societies at an economical price compared

to the market price. This process ensures followings:

o quality fibre,

o Constant availability

o Competitive price

Services:

Develop a trust among all cluster members in the location

Train members to perform a better quality life

Provide training to new entrepreneurs to join in the coir related activities

Enhance skills of existing members for producing on high end machines

6.4 Conceptual Framework/ Project Strategy

The overall framework of the project is the development of coir sector. It has

strategized the intervention on the guidelines and framework of SFURTI

schemes of Coir Board. The intervention will take care of followings:

Bring all stakeholders together and increase effectiveness of the cluster

39

Take a cluster approach in the area and improve life and product cycle of

coir workers and coir

Ensure availability of raw material and provide them locally in quality

methods

Frame out a proper value chain suitable to the cluster and involve

stakeholders in the process

Establish a common facility centre

Help to develop value added products and link them with export market for

getting high return to the coir workers

Holding the slogan of „zero‟ waste policy convert its waste to products and

offer them in the market

Develop forward and backward linkages to ensure vibrancy of the cluster

Project Strategy:

The basic strategy proposed for the improvement of Haripad Cluster is:

Enhance active participation of coir workers and other stakeholders

Guide and support for producing value added products in the cluster

Lead the project intervention in democratic set up by forming a SPV

Ensure involvement of Govt. of Kerala, in the status of implementing agency

Ensure stake of beneficiaries in the project by contributing 25% of the

project cost

Provide a permanent position to Haripad cluster in the international coir

market

Overall socio-economic development of the artisans in the cluster

40

CHAPTER 7: PROJECT INTERVENTIONS (CORE SFURTI)

No cluster intervention can be successful without a proper mix of soft skills on various

functional and management themes. In Harid cluster, as it is proposed under Major

category members are to be trained on various functionalities. Following soft

intervention is proposed to keep vibrancy and dynamism in the cluster.

The following Soft and Hard Interventions are envisaged in the Haripad Cluster:

Soft Interventions:

Sr. No. Intervention Need

i. Cluster awareness

and Trust Building

workshops:

Cluster promotion is a group activity wherein all

stakeholders are to be apprised on commonalities and

combined visioning exercise is to be held. This will

also be helpful to have an understanding to each of

the stakeholders on their duties and responsibilities

that they have to perform for the vibrancy of the

cluster. In view of this a series of awareness and trust

building workshops are proposed. Over a period of 3

years it is estimated to impart inputs for at least 1500

cluster members.

ii. Exposure visits: As the cluster intervention is taking place in adult

training method, more inputs on cluster dynamism,

process, collectiveness etc. are to be shown to its

members. This will be managed by taking the

members to successful cluster locations within Kerala

or its nearby locations. It is estimated to organize

exposure visits to 100 members over a period of 3

years.

41

iii. Visit to national /

international

exhibitions:

The cluster will be, by default, producing value added

products in higher volume. While with the funding

support of SFURTI schemes, the cluster will be able to

produce, there is tremendous need to market all the

products it is produced. As coir products are being used

almost all houses and offices, its market should be

done directly to the customers to the maximum extent.

With this purpose, visit to national and international

exhibition is planned for 100 members within three

years.

iv. Entrepreneurship

Development

Programme

(EDP):

Success of any project is basically depends upon the

ability of its leader. “Enterprise never fails, and if, that is

only Entrepreneur”. As such there is a tremendous

need for developing entrepreneurial competencies /

acumen of the cluster leaders. To develop a group of

best performers within the cluster, entrepreneurship

development training is proposed for 50 members.

v. Skill and skill up-

gradation Training:

Technical competency of artisans is one of the basic

requirements for success of the cluster intervention;

especially when the cluster is proposed to produce

value added products. As Tufted Mat production is high

technology based production process the cluster needs

higher level technicians and skilled persons. It is in this

context skill training or its upgradation is proposed for

100 members.

vi. Training program

for Social

Engineering

(TSE):

As the basic aim of the cluster intervention is to provide

a quality life to its members there is a need for training

on quality life and social engineering. The development

of society is based on the process it takes under social

engineering. As the cluster like Haripad, wherein more

42

than 8000 artisans are directly or indirectly benefited

from the intervention process that emerged and to be

build on commonalities require adequate attention on

social engineering. Programme is proposed to conduct

for 300 members on social engineering.

vii. Management

Development

Training (MDP):

As in the case of need for entrepreneurial personalities,

cluster requires efficient managers to perform its

functions. As such Management Development Training

is also proposed for 30 members in the first year, so

that they will be groomed to perform the functions when

the cluster is getting promoted.

viii. Vendor

Development

Programme

One of the main issues facing by the coir industry in

haripad is the sale of coir products. So a vendor

development programme shall be arranged to develop

vendors

ix Workshop on

Development

Schemes (WDS):

In the cluster, there is a need for multiplied number of

entrepreneurs. As such to attract the youth to be

entrepreneurs, they should be sensitized on

development schemes being promoted by coir board,

coconut board and various other developmental

agencies. A workshop on such schemes is proposed in

the first year to train at least 35 youth.

x Training on Quality

Production (TQP):

There is a need for giving more attention to production

parameters. In each and every stage of production,

each one should take care of quality. Quality

consciousness should be build at all level. In view of

this a training programme for 35 members are

proposed.

xi Training

Programme on

International

Training on International Marketing is proposed for 10

core members. As the tufted mat is generally used for

export, there is need for strong marketing section within

43

Marketing (TPIM): the cluster. The propose programme will take care of

such needs. They will also be imparted inputs on

design and packing.

xii

Website creation

As the business of modern era is mostly on on-line

based, the cluster needs its own website and online

marketing services. It is in this context a website is

proposed for the cluster.

Hard Interventions:

While the soft intervention useful to make changes in the life, thinking pattern and

action of the cluster members and society, the hard intervention is aimed at giving

enhancement of income source to the artisans/ cluster members. In Haripad cluster

following hard intervention is proposed:

Sl.No Intervention Need

1 Common Facility

Centres for Raw

Material Bank

The objective of the Raw Material Bank is to ensure

availability of quality raw material on a continuous basis

to the beneficiaries of SFURTI Cluster at a reasonable

price. The service offered by the raw material bank is

procurement, storage and supply of the various raw

materials utilized by the coir cluster like yarn, husk etc.

The suggested raw material bank may have the capacity

to store about 140 ton fiber. The beneficiaries can be

utilized the service of the raw material bank. They can

purchase the raw material at a reasonable price from the

raw material bank.

2 Training Centre

It was a long time dream of the coir industry to introduce

a contrivance for reducing the drudgery of the labourer

and to improve the productivity and also enhance the

earnings of the workers engaged in spinning. As a result

44

of research and development, a spinning device for

attaining the real goals of reducing the drudgery,

improving the productivity and to improve the working

environment, the automatic spinning machine units were

introduced in the industry. This is to be installed in the

cluster.

The introduction of automatic spinning machine units has

paved the way for increasing the productivity and attracts

the new generation to the coir sector. This further helps

to the rejuvenation of coir industry. The realization of

scope of mechanization in the coir industry and to

increase the production output to meet the market

demand, the beneficiaries decided to set up a training

centre of Automatic spinning machine as part of the

SFURTI.

The envisaged common facility centre will be utilized both the SPV as well as other

public. Following facilities will be provided to other public in a differential rate method.

i. Supply of raw material

ii. Production of coir yarn in automatic spinning machine with double head and

conveyors

iii. Training on High End Automatic Spinning Machines

45

CHAPTER 8: SOFT INTERVENTIONS

Followings are the soft intervention proposed for the cluster:

Sl.

No.

Project Intervention No. of

Batches

Total

Beneficiaries

Cost

(Rs. In

Lakhs)

i) Cluster Awareness & Trust Building

workshops for 1000 artisans/ workers/

cluster members

15 batches

covering

1000

members

1000 3.00

ii) Exposure visits for familiarizing

cluster intervention

3 Batches 100 3.00

iii) Visit to national/ international

exhibitions:

2 times 60 5.00

iv) Skill & skill upgradation training 3 batches 100 3.00

v) Entrepreneurship Development

Programme (EDP)

2 batches 80 3.00

vi) Management Development Training 1 batch 25 3.00

vii) Vendor Development Programmes 1 batch 25 1.50

viii) Workshop on development schemes 1 batch 100 0.50

ix) Training Programme on quality

production

1 batch 100 1.50

x) Exposure visit to successful cluster 1 batch 60 1.50

xi) Training Programme on International

Marketing

1 batch 10 1.20

xii) Web site creation 0 0 0.30

Total 1660 25.00

46

CHAPTER 9: HARD INTERVENTIONS

The cluster would like to establish three common facility centre consisting of

Automatic spinning machine (training cum production centre) and Raw material

bank.

A. Common Facility Centre (CFC – 1)

A1 Raw Material Bank & Coir Yarn Production cum Training centre

Amt. Lakhs

i) Land Available

ii) Building 22.00

iii) Mini Affluent plant 8.00

iv) Plant and Machinery 50.15

v) Miscellaneous Fixed Assets 0.50

vi) Preliminary and Preoperative Expenses 1.00

vii) Provision for Contingency 0.50

viii) Working Capital

16.40

Grant Total : Project Cost 98.55

# Means of Finance Amt. Lakhs

i) Fixed Capital

a Beneficiary Contribution-25% of Fixed Capital 20.54

b Grant from Coir Board, Govt. of India- 75% of Fixed Capital

61.61

Sub Total(a+b) 82.15

ii) Working Capital

Working Capital Corpus-20% of Total fixed Capital

16.4

a Beneficiary Contribution-25% of W C Corpus 4.1

b Grant from Coir Board- Working Capital Corpus Fund(75% of W C Corpus)

12.3

Sub Total(a+b) 16.4

Grant Total (i)+(ii) 98.55

Detailed Business Plan is provided in Chapter No. 14

47

B. Common Facility Centre (CFC – 2)

A1 Raw Material Bank & Coir Yarn Production cum Training centre

Amt. Lakhs

i) Land Available

ii) Building 22.00

iii) Mini affluent plant 8.00

iv) Plant and Machinery 50.15

v) Miscellaneous Fixed Assets 0.50

vi) Preliminary and Preoperative Expenses 1.00

vii) Provision for Contingency 0.50

viii) Working Capital 16.40

Grant Total : Project Cost 98.55

# Means of Finance Amt. Lakhs

i) Fixed Capital

a Beneficiary Contribution-25% of Fixed Capital 20.54

b Grant from Coir Board, Govt. of India- 75% of Fixed Capital

61.61

Sub Total(a+b) 82.15

ii) Working Capital

Working Capital Corpus-20% of Total fixed Capital

16.4

a Beneficiary Contribution-25% of W C Corpus 4.1

b Grant from Coir Board- Working Capital Corpus Fund(75% of W C Corpus)

12.3

Sub Total(a+b) 16.4

Grant Total (i)+(ii) 98.55

48

C. Common Facility Centre (CFC – 3)

A1 Raw Material Bank & Coir Yarn Production cum Training centre

Amt. Lakhs

i) Land Available

ii) Building 22.0

iii) Mini Affluent plant 8.00

iii) Plant and Machinery 50.15

iv) Miscellaneous Fixed Assets 0.50

v) Preliminary and Preoperative Expenses 1.00

vi) Provision for Contingency 0.50

vii) Working Capital 16.40

Grant Total : Project Cost 98.55

# Means of Finance Amt. Lakhs

i) Fixed Capital

a Beneficiary Contribution-25% of Fixed Capital 20.54

b Grant from Coir Board, Govt. of India- 75% of Fixed Capital

61.61

Sub Total(a+b) 82.15

ii) Working Capital

Working Capital Corpus-20% of Total fixed Capital

16.4

a Beneficiary Contribution-25% of W C Corpus 4.1

b Grant from Coir Board- Working Capital Corpus Fund(75% of W C Corpus)

12.3

Sub Total(a+b) 16.4

Grant Total (i)+(ii) 98.55

49

CHAPTER 10: PROJECT COST AND MEANS OF FINANCE

A. Project Cost And Means Of Finance

Sl.No. Project

intervention Cost

(Rs.Lakhs)

Means of Finance

Grant from Coir Board, Govt. of India

Beneficiary Contribution

1 Soft Intervention 25.00 25.00

2

Hard Intervention

a CFC-1

i) Fixed Capital 82.15 61.61 20.54

ii) Working Capital 16.4 12.3 4.1

Sub Total(i+ii) 98.55 73.91 24.64

b

CFC-2

i)

Fixed Capital 82.15 61.61 20.54

ii) Working Capital 16.4 12.3 4.1

Sub Total(i+ii) 98.55 73.91 24.64

c CFC-3

i) Fixed Capital 82.15 61.61 20.54

ii) Working Capital 16.4 12.3 4.1

Sub Total(i+ii) 98.55 73.91 24.64

Total Hard Intervention(a+b+c)

295.65 221.73 73.92

3 IA Cost 20.00 20.00

4 TA Cost 17.3 17.3

Total(1+2+3+4) 357.95

284.03 73.92

50

B. Project Phasing:

Sr. No

Name of Activity Year 1 Year 2 Year 3

Qtr 1

Qtr 2

Qtr 3

Qtr 4

Qtr 1

Qtr 2

Qtr 3

Qtr.4 Qtr 1

Qtr 2

Qtr 3

Qtr 4

1. Cluster Awareness & Trust Building

2. Exposure visits for familiarizing cluster intervention

3. Visit to Exhibitions

4. Skill Trainings

5. EDP

6. MDP

7. Workshop on Developmental Schemes

8. Training progr. On quality production

9. Trg. On intl Marketing

Website creation

51

CHAPTER 11: PLAN FOR CONVERGENCE INITIATIVES

Any cluster intervention will be successful once the synergy of support system and

stakeholders are effectively channelized. In the coir sector, as in the case of Coir

Board, Govt. of Kerala has also concentrated well. There are some of the schemes

being implemented by the Government by its funding as well as also implementing

schemes with central govt. support. The proposed project is mooting proposal to

convergence with following schemes: The DPR has taken almost all possible

anticipated expenses. However, any further escalation will be met by the project itself

from other source of socio-economic upliftment bodies. However, followings

converged as proposed:

a) Ministry of Commerce, Government of India, New Delhi

Market Development Assistance Scheme of Ministry of Commerce,

Government of India for market development internationally. A sum of Rs.4.00

lacs is expected under this scheme.

b) Directorate of Coir Development, Government of Kerala

Market Development Assistance: An amount of Rs. 800.00 lakhs has been

apportioned in the budget by Government of Kerala. The cluster is expected to

avail Rs. 3.50 lakhs under this scheme.

Government of Kerala is also supporting cluster development program: A sum

of Rs. 150.00 lacs has been earmarked for the same. Since the cluster is

having societies as stakeholders, a sum of Rs.4.00 lacs may be sourced under

this scheme.

Husk Collection Scheme : To promote utilization of husk in the State, State

Government is offering subsidy for the following :

- Husk collection

52

- Establishing Defibering units

- Revamping existing DF mills.

State Government promoting husk collection through workers‟ co-operatives

and Kudumbashree units. A sum of Rs. 6 crores has been ear marked on this

account. During the cluster development program it would like to avail Rs. 5

lacs from this scheme.

Regulated mechanization of coir Industry - Under this scheme Government of

Kerala is providing subsidy for procuring computer with software for computer

aided design. Government has earmarked Rs. 10 crores for this purpose. A

sum of Rs. 2 lakhs may be availed by the cluster.

c) Coir Board

Avail the schemes of Coir Udyami Yojana of Coir Board for developing private

entrepreneurs. 8 private entrepreneurs will be developed availing this scheme.

This scheme will have the component of subsidy as well as loan. A sum of

Rs. 80 lacs may be earmarked under this scheme.

Under Mahila Coir Yojana, Coir Board is providing subsidy for purchasing

machinery for coir handcraft and jewellery manufacturing units. A sum of Rs.

60,000/- is earmarked.

d) Social Security Schemes

During the cluster intervention, the artisans will be linked to following social

security schemes:

Pradhan Mantri Suraksha Bhima Yojana

Pradhan Mantri Jan Dhan Yojana

Atal Pension Yojana

53

CHAPTER 12: ENHANCED PROJECT COST AND

MEANS OF FINANCE

The project cost and means of finance is indicated in Chapter 10 of this report.

We have estimated all possible interventions within the budget outlay and

ability of the beneficiary. However, still we seek convergence of followings:

Sl.

No. Particulars

Amount in

Lakhs

1 Market Development Assistance Scheme of

Ministry of Commerce, Government of India

4.00

2

Market Development Assistance,

Directorate of Coir Development,

Government of Kerala

3.50

3 Cluster development program ,Directorate

of Coir Development, Government of Kerala

4.00

4 Husk Collection Scheme, ,Directorate of

Coir Development, Government of Kerala

5.00

5 Regulated mechanization of coir industry 2.00

6 Coir Udyami Yojana of Coir Board 80.00

7 Mahila Coir Yojana of Coir Board 0.60

Total 99.10

54

CHAPTER 13: PROJECT TIMELINE

SOFT INTERVENTION

Sr. No

Name of Activity Objective Duration Year 1 Year 2 Year 3

Qtr 1

Qtr 2

Qtr 3

Qtr 4

Qtr 1

Qtr 2

Qtr 3

Qtr.4 Qtr 1

Qtr 2

Qtr 3

Qtr 4

1 Cluster Awareness & Trust Building

To build awareness on cluster concepts

One day

2 Exposure visits for familiarizing cluster intervention

Familiarizing cluster intervention

One day

3 Visit to Exhibitions To promote the business

4 Skill Trainings To develop innovative and value added products

3 days

5 EDP Attract more entrepreneurs to the sector

5 days

6 MDP Development of Managerial competency

5 days

7 Workshop on Developmental Schemes

Create Awareness on possible development

1 day

8 Training progm. On quality production

Develop quality consciousness

1 day

9 Trg. On intl Marketing Develop competent marketing cadre

3 days

Website creation √

55

Hard Intervention

Year 1 Year 2 Year 3

Sr. No. Name of Activity Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1 Finalization of the project

2 Registration of CFC

3 Site Selection

4 Site Development

5 Machinery identification

6 Submission of project to Coir Board

7 Fund Mobilization

8 Civil Work construction

9 Machinery sourcing

10 Commissioning of machinery

11 Trail production

12 Commercial production

56

CRITICAL PATH METHOD

A 0 0

Dur-0

month

B 2 0

Dur-

2month

F 2 5

Dur-

2month

N 2 20

Dur-2month

Dur-1month

L 2 16

Dur-2month

M 2 18

Dur-2month

Hard

Intervention

will

complete in

22 months

Proposed activities for hard intervention

A. In principle approval of the project

B. Fund mobilization

C. Site development

D. Getting statutory approvals

E. Application to Electricity Board

F. Preparing building plans and approval

G. Tendering for construction

H. Initiation of construction

I. Electrical installation

J. Tendering process for machinery

K. Finalization of machinery

L. Installation of machinery

M. Trial Run

N. Commercial Production

C 3 2

Dur-

1month

D 2 3

E 1 3

Dur-

1month

Dur-

2month

G 2 7

I 1 9

H 2 9 Dur-

2month

Dur-

2month

J 3 11

Dur-

1month

K 2 14

Dur-

2month

57

CHAPTER 14: DETAILED BUSINESS PLAN

PROJECT PROFILE FOR RAW MATERIAL BANK,

AUTOMATIC SPINNING UNIT & TRAINING CENTRE

1.0 Introduction

There will be two main components in the Common Facility Centre. The first

will be Raw Material Bank is to ensure availability of quality raw material on a

continuous basis to the beneficiaries of SFURTI Cluster at a reasonable price.

The service provide by the raw material bank is procurement, storage retting,

cleaning and supply of the raw fibre to the societies. This raw material bank can

ensure the low cost and constant availability of fibre to the artisants. Another

importance is that with this activity, the private fibre suppliers will be eliminated.

The infrastructure required for the Raw Material Bank will comprise of a

building with an office and a warehouse for storage of raw material, a retting

tank and a Vehicle. The suggested raw material bank may have the capacity to

store about 140 ton fiber. The beneficiaries can be utilized the service of the

raw material bank. The raw material bank will supply fibre to the societies in

their location at reasonable price.

The second component is a training cum production centre in yarn production.

The centre will have 10 Automatic Spinning Machine with auto feeder. There

will be a provision for training centre for 30 members in the centre. At present

the machine yarn has good demand from buyers. So the 10 units installed will

act as a change agent in the coir community. The interested artisants can come

over to the production centre and avail training. Then they can use the CUY like

schemes of coir board or schemes of state government to upgrade their

production.

58

2.0 Financial Details

Project Details

a. Land - Available

Land is identified in the following societies and the same will register on

lease in the name of SPV for a period of 15 years.

CFC 1- Thamallackal CVCS Ltd No. 316

CFC 2 – Mahadevikad West CVCS Ltd No. A 698

CFC 3 – Muthukulam CVCS Ltd No. 72

b. Building

B Building Area Unit Cost Amount Rs. (Lakhs)

1 Building Construction – Raw Material Bank, Spinning unit, Training Centre,

2750 sq.ft 800/Sq.Ft 22.00

2 Tank 20 M x 5 M x 1.1 M – 1 for retting & 1 for ETP

8.00

Sub Total B 30.00

c. Plant and Machinery (For one Common Facility Centre) Three such

CFCs are proposed in the cluster.

Sl.No. Particulars Quantity Amount (Rs. in

lakhs)

1

Ginning machine-2 Ton Capacity -7 Hp

1 2.0

2 Transportation vehicle 1 10.0

3 Spooling Machines 2 4.0

4 Tool Kit 1 1.0

5 Automatic Spinning Machine 10 33.2

59

with auto feeder and conveyor

Total

50.15

60

d. Miscellaneous Fixed Assets- 0.50 Lakhs

e. Preliminary & Preoperative Expenses 1.00 Lakhs

3 Project Cost

Sl.No Particulars Amount(Rs.Lakhs)

1 Land Available

Building- 1. Raw Material warehouse 2. Training Centre

22.00

3 Mini Affluent plant ( Retting Tank and ETP Tank)

8.00

4 Machinery & Equipments- 1. Automatic Spinning Unit with

auto feeder and conveyors 2. Ginning machine 3. Spooling machine 4. Transportation vehicle 5. Machine service tools

50.15

5 Miscellaneous fixed asset 0.50

6 Preliminary& Pre-operative Expenses 1.00

7 Provision for contingency 0.50

7 Working Capital corpus 16.40

Total Fixed Capital 98.55

4 Means of Finance:

Sl.No Particulars Amount(Rs.Lakhs)

1 Beneficiary Contribution 24.55

2 Grant from Coir Board 74.00

Total 98.55

5 Annual Sales Turnover

Amount in Lakhs

Sl.No. Item Quantity Rate Amount (Rs.)

1 Fibre (Ton) 3000 0.21 630

2 Coir Yarn 180 0.46 82.8

Total 3180 712.8

61

6 Cost of Production

a. Raw Material

SL No

Description Qty. Unit Rate Rs. (Lakhs)

Amount Rs. (Lakhs)

1 Fibre 3180 Tn .18 572.4

Total 1080 572.4

Total Annual Raw Material Requirement: Rs. 572.4Lakhs

b. Utility - - 1.98 Lakhs

c. Man Power

Sl.No. Designation Unit Unit Cost Annual Amount

(Rs)

1 Manager 1 0.2 2.4

2 Assistant cum Technician 2 0.15 3.6

3 Security 1 0.12 1.44

4 Driver 1 0.12 1.44

5 Labours for Spinning Unit 10 0.125 15

6 Retting & Cleaning staff 8 0.25 24

Sub Total 47.88

Employees benefit 9.58

Grand Total 23 57.46

d. Repairs, Maintenance and Insurance- 1.0 Lakhs

62

7 Project Profitability Statement

(Amount in Lakhs)

Sl.No. Particulars Ist Iind IIIrd IVth Vth

1 No. of working Days 300 300 300 300 300

2 No. of shifts 1 1 1 1 1

3 Production in unit of production 3180 3816 4452 5088 5724

4 Annual Income 712.8 855 998 1140 1283

Net Sales

712.80 855 997.92 1140.48 1283.04

B. Cost of Production

1 Raw Materials

572.40 687 801 916 1030

2 Salaries & Wages 57.456 69 80 92 103

3 Rent 0 0 0 0 0

4 Utility 1.98 2.178 2.376 2.574 2.772

5 Repair & Maintenance 1 1 1 1 1

8 Depreciation 6 6 5 4 4

Total 639 765 890 1016 1142

Gross Profit 74 91 108 124 141

C. Administration & Sales Expenses

1 Selling & Administrative expenses 0.12 0 0 0 0

Profit before Int & Tax 74 90 107 124 141

E Net Op. Profit 74 90 107 124 141

G Net Profit after Tax 74 90 107 124 141

H Dividend

I Net Profit after Dividend 74 90 107 124 141

H Depreciation 6 6 5 4.567185 4

I Annual Cash Accrual 80 96 112 129 145

63

8. Cash Flow Statement

( Rs. in Lakhs)

Source of Fund Ist IInd IIIrd IVth Vth

1 Promoters‟ capital 25

4 Depreciation 6 6 5 4 4

5 Profit before Int & Tax 74 90 107 124 141

Total 104 96 112 129 145

B. Application of Funds Ist IInd IIIrd IVth Vth

1 Capital Expenditure 80.65

2 Pre-operative expenses 1

3 Increase in W. Capital 5 0 1 1 2

Total 86 0 1 1 2

Opening Balance 0 18 114 225 352

Surplus (A-B) 18 96 111 127 143

Closing Balance 18 114 225 352 495

9. Projected Balance Sheet

( Rs. in Lakhs)

Liabilities

Year

Sl.No. Liabilities I II III IV V

1 Promoters‟ Capital 25 25 25 25 25

2 Long Term Loan 0

3 Working Capital Loan 0

4 Reserve & Surplus 74 164 271 396 537

Total 98 189 296 420 561

Assets

Sl.No. Assets I II III IV V

64

1 Asset Value 81.65 81.65 81.65 81.65 81.65

2 Depreciation 6.265 12 17 21 25

3 Net Block 75 70 65 60 57

4 Current Assets 5 5 6 8 10

5 Cash in hand & bank 18 114 225 352 495

6 Investment

Total 98 189 296 420 561

10. Break Even Point

( Rs. in Lakhs)

A. Variable cost 1 Raw Material 572

Power 2

Administrative expenses 0.12

575

B Semi Variable and fixed cost 1 Salary & wages 57

2 Contingency 0

3 Maketting overheads 0

4 Repair and maintenance 1

Depreciation 6

65

Annual Income 713

Variable cost 575

SP-VC 138

Breakeven point at percentage of installed capacity 32.8

65

11. Depreciation Amount

Building (5%)

Machinery (10%) &Miscellaneous Fixed Asset (10%)

31 51 Year 1 1.55 5.1 6.65

29.45 45.9 Year 2 1.48 4.59 6.07

28.0 41.31 Year 3 1.4 4.1 5.5

26.6 37.2 Year 4 1.33 3.7 5.03

25.3 33.5 Year 5 1.3 3.3 4.6

66

CHAPTER 15: PROPOSED IMPLEMENTATION FRAMEWORK

The project will be implemented in line with the cluster norms and regulations

stipulated by the Nodal Agency, i.e, Coir Board with the support of a Technical Agency

and will be implemented through Directorate of Coir Development, Govt. of Kerala,

Thiruvananthapuram. They will ground the activities through a locally formed SPV

wherein experienced individuals and co-operative societies are in leading role. In line

with this frame work Coir Board has entrusted the responsibilities of Technical Agency

to Entrepreneurship Development Institute of India and they in turn suggested Project

Officer, Coir Project Office-Alappuzha on behalf of Coir Directorate will implement

activities. Eeach of these agencies have prescribed norms for fulfilling their

responsibility.

The SPV is registered under the Travancore-Cochin Literacy, Scientific and Charitable

Societies Act XII of 1955.

15.1 Role of the Implementing Agency – Coir Directorate (Project Officer, Coir

Project Office):

I. Recruit a full-time CDE in order to ensure efficient implementation of the

project;

II. The IA would identify and arrange suitable land for the project whose

book value may be shown as their contribution towards the project;

III. Implement various interventions as outlined in the approved DPR;

IV. Undertake procurement and appointment of contractors, when required,

in a fair and transparent manner;

V. The IA will enter into an agreement with the Nodal Agency for timely

completion on cluster intervention and proper utilization of Government

Grants;

VI. Operation & Maintenance (O&M) of assets created under the project by

way of user-fee based model;

67

VII. Responsible for furnishing Utilization Certificates (UCs) and regular

Progress Reports to Nodal Agency in the prescribed formats.

The IA shall endeavor to increase participation of various other cluster

stakeholders and institutions by forming a Cluster Advisory Group, traditional

industry enterprises, support service institutions, banks, etc. with the objective of

fostering increased level of involvement of various cluster stakeholders and

strengthening the implementation of the project.

15.2 Details of Strategic Partner and Other Project Stakeholders

Strategic Partners:

1. Coir Board, Cochin

2. Director, Directorate of Coir Development, Govt. of Kerala, Trivandrum

3. Coir Co-operative Societies

4. Entrepreneurship Development Institute of India

Project Stakeholders:

a) Machinery Suppliers

b) Kerala State Co-operative Coir Marketing Federation (Coirfed)

c) Commercial banks and micro finance institutions

d) National Bank for Agriculture and Rural Development

e) Small Industries Development Board of India, Cochin

f) R&D, Testing and Training Institutions

g) Central Coir Research Institute at Kalavoor

h) National Coir Training and Design Centre at Alleppey

i) Central Institute of Coir Technology, Bangalore

j) MSME-DI in Thrissur.

15.3 Registration of the SPV

68

The SPV is registered under the Travancore-Cochin Literacy, Scientific and

Charitable Societies Act XII of 1955 vide Regn No. ALP/TC/403/2015 Dtd

15.07.2015. . It was registered by a group of 9 members who are belongs to

coir sector with vast experience in the field as follows:

Sl.

No. Name & Occupation Present Address Position Signature

1

Sri. K.M.Raju,

President,

Nangyarkulangara ICVCS

Ltd No.KM 1095

Kocharyattu

Nangyarkulangara

PO

Chairman

2 Sri. K.R.Madhu, Project

Officer(Coir), Kayamkulam

Kunnil Krishnajali,

Bharanickavu,

Pallickal P.O.

Vice Chairman

3

Sri. K.Suran

Secretary, Thrikkunnapuzha

Kizhakkekara South, CVCS

Ltd No.486.

Mangalathuchirayil

, Valaiyaparambu

P.O

Karthikappally

Treasurer

4 D. Kasinathan, President

Mangalam CVCS 483

Valil Puthuval,

Mangalam P.o. Member

5

Sri. Sasankan.P

Business Manager ,

Chingoly West CVCS LTD

N. A695

Kattil thekkathil,

Chingoli P.O. Member

69

6

Sri. K.Prasad

Secretary

Arattupuzha Kizhakekara

North CVCS Ltd No. 550

Mapplilasseril,

Mahadevikad P.O. Member

7

Sri. K.K. Das

President, Mahadevikadu

West CVCS LTD NO. A 698

Kondekattil,

Mahadevikad PO Member

8

Sri. Udayan V

President, Thrikkunnapuzha

Kizhakkekara North, CVCS

Ltd No.461.

Deepabhavanam,

Kizhakekara

Vadaku,

Valiyaparambu

P.O.

Member

9

Smt. Thankamma M

Secretary

Muthukulam CVCS Ltd

No.72

Kollante Kattil,

Muthukulam North,

Choolatheruvu PO

Member

15.4 Membership of the SPV:

a) Any person belonging to Karthikappally, Mavelikkara & Chengannur Taluk of

Alappuzha District who are office bearers of Coir Vyavasaya Co-operative

Societies & Integrated Coir Vyavasaya Co-operative Societies shall be eligible

for the membership.

b) Sympathizers effectively engaged in coir sector also shall be eligible for

membership but, they should not exceed 10% of the total membership.

70

15.5 Executive Committee and Board of Directors:

The SPV will have an Executive Committee for day to day management of the

society. This will be managed by a group of Board of Directors from following

constituents/agencies

Category A

1) An officer from Coir Board not below the rank of Deputy Director.

2) Lead bank manager,Alappuzha.

3) The chairman,Kerala Coir Workers Welfare Fund Board.

4) A person from Entrepreneurship Development Institute of India(EDII).

5) The Director,NCRMI.

6) A nominee of Coir Director,Thiruvananthapuram.

7) Project Officer(Coir),Kayamkulam.

8) District Mission Co-ordinator, Kudumbasree.

9) The Director,Central Coir Research Institute,Kalavoor

Category B

1) Representative from Coir Vyavasaya Co-operative Societies &

Integrated Coir Vyavasaya Co-operative Societies.

Category C

1) Sympathizers effectively engaged in coir sector.

IV Officer Bearers

The Office Bearers of the Society will be Chairman , Vice Chairman, and

Treasurer.

71

CHAPTER 16: EXPECTED IMPACT

Once the sanction is accorded for this report, there will be a massive change in the

history of coir development in Kerala. The consideration of the cluster will cause to

birth of a vibrant cluster which in turn will generate a demonstrable location for coir.

Following impacts are expected from the intervention:

The middle men in the coir fibre sector will be completely eliminated.

Turnover of the cluster will be increased from Rs.20.00 crores to Rs.40

crores.

There is an expected export earning to the tune 300%.

There will be vast change in number of working days. At present

approximately 150 days are engaged by works. This will increase upto

225 working days.

Current per day income of Rs.200/- to -Rs.250/- will be enhanced to

more than Rs.350/- per day.

A substantial percentage of marketing will be done through E-commerce

An exclusive community centered organization – Haripad Coir Cluster

Development Society (HCDS) will get established for the welfare of the

coir workers in the location.

Vibrancy of the cluster will attract more young hands into the coir sector and

this will be helpful to address unemployment problems of the location. As there

is a provision to regular supply of quality fibre by establishing a raw material

bank more value added products could be produced at cluster location by

various segments.

Altogether there will be a substantial change in socio economic standards of

coir workers.

72